Iran Weighs Response as US Sanctions Bite

TEHRAN, IRAN - As Iranians awoke Tuesday to renewed U.S. sanctions that had been lifted by Tehran's nuclear deal with world powers, the question on everyone's mind remained: What happens now?

From deciphering President Donald Trump's tweets on Iran - including one demanding "WORLD PEACE" - to trying to figure out how much their cratering currency is worth, Iranians appear divided on how to respond.

The same goes for their theocratic government, which for now is abiding by the atomic accord. President Hassan Rouhani, a relative moderate whose administration struck the 2015 deal, has taken an increasingly confrontational line in recent weeks, applauded by hard-liners who had long opposed him. Then in a speech on live television Monday night, Rouhani seemed to suggest that direct talks with Trump could be possible.

That's something North Korean Foreign Minister Ri Yong-hu, who visited Tehran on Tuesday and met with its leadership, knows firsthand.

Whether Iran should choose a North Korea-style photo-op with the American president who backed out of the nuclear deal or abandon the unraveling accord and increase its uranium enrichment remains a fiercely debated question in Iran. But everyone agrees something has to be done soon, as sporadic protests across the country of 80 million people only add to the pressure.

Various currencies are displayed without the going rate on a money exchange shop window in downtown Tehran, Iran, Aug. 7, 2018.

"The situation is not good right now; nothing is clear," said Ebrahim Gholamnejad, a 41-year-old carpenter. "The economy is turning into a jungle."

The newly imposed American sanctions target U.S. dollar financial transactions, Iran's automotive sector, and the purchase of commercial planes and metals, including gold. Even stronger sanctions targeting Iran's oil sector and central bank are to be re-imposed in early November.

On Tuesday, German car and truck maker Daimler AG said it was suspending its "very limited" activities in Iran and shuttering a representative office. European companies had known since Trump's announcement in May that sanctions were coming back. Airbus at that time suspended plane deliveries to Iran; of 98 orders, only one A321 had been delivered, plus two A330s that were sold to a company that leased them to an Iranian customer.

In this photo provided by Tasnim News Agency, a traditional water cannon salute welcomes an Iran Air's new commercial aircraft at Mehrabad airport in Tehran, Iran, Aug. 5, 2018.

As uncertainty over the Iran nuclear deal grew after Trump entered the White House, Iran's already-anemic economy nosedived. The country's monthly inflation rate has hit double digits again and the national unemployment rate is 12.5 percent. Among youth, it is even worse, with around 25 percent out of a job.

Iran's currency, the rial, now trades over double its government-set rate to the U.S. dollar. Trying to stem the loss, the Iranian government five months ago shut down all private currency exchange shops, but the black market has thrived.

Currency exchange shops line a street in downtown Tehran, Iran, Aug. 7, 2018. Money exchange shops across Iran cautiously reopened on Tuesday after being shut for five months.

On Tuesday, central bank chief Abdolnasser Hemmati allowed private currency exchanges to reopen. Shops welcomed customers, though some displayed no exchange rates late into the morning amid confusion over how much the troubled rial was truly worth.

Iranian authorities recently arrested 45 people, including the central bank's deputy chief, as part of a crackdown on financial fraud. On Tuesday, Iran's state-controlled television aired a 30-minute documentary applauding the central bank's new economic decisions.

The hard-line Keyhan newspaper, which previously lampooned Rouhani, bore his picture on the front page with a large headline quoting him saying: "The way we can surpass all sanctions is to have unity."

But what to do next remains an open question. Iran continues to abide by the nuclear deal it struck with the Obama administration and other world powers, which limits its enrichment of uranium in exchange for the lifting of sanctions, and makes it impossible for Iran to quickly develop a nuclear weapon. Iran has always said its nuclear program is entirely peaceful.

In recent weeks, Iran has prominently displayed its centrifuges and threatened to resume enriching uranium at higher rates. At one point Rouhani renewed a long-standing Iranian threat to close off the Strait of Hormuz, through which a third of all oil traded by sea passes.

Trump for his part has ricocheted between threats and promises to speak with Iranian officials without preconditions, offering mixed messages to both the Iranian public and its government. That continued Tuesday, as he described American actions in a tweet as "the most biting sanctions ever imposed, and in November they ratchet up to yet another level."

"Anyone doing business with Iran will NOT be doing business with the United States," he wrote. "I am asking for WORLD PEACE, nothing less!"

John Bolton, the U.S. national security adviser, said the intent of sanctions is not to bring about Iranian "regime change."

But we definitely want to put maximum pressure on the government, and it's not just to come back to discuss fixing a deal that's basically not fixable," Bolton said Tuesday on Fox News. "We want to see a much broader retreat by Iran from their support for international terrorism, their belligerent activity in the Middle East and their ballistic missile, nuclear-related program."

Though Iranians already are angered by Trump putting their nation on his travel ban list, some say talks with the U.S. president might be necessary. Others insist that Iran, which has weathered decades of previous sanctions, should stand its ground.

"I believe America cannot do a damn thing," said Farzaneh, a 54-year-old housewife who declined to give her last name out of privacy concerns. "It can't do anything, because Iranians are backing each other."

A street musician plays music as a woman makes her way in downtown Tehran, Iran, July 30, 2018. Iran's currency has dropped to a record low ahead of the imposition of renewed American sanctions.

Direct talks with the U.S. also would challenge the Islamic Republic leadership, which for nearly 40 years has encouraged flag-burning demonstrations against "the Great Satan."

On Tuesday, Ri, the North Korean foreign minister, who was involved in Pyongyang's Singapore talks with Trump, met with Iranian leaders, though it's unclear what he discussed with them.

For now though, Iranians say they can only wait for the next Trump tweet or their government's decision on how to respond.

"People should just keep calm, because the other party wants to disrupt our peace," said Gholamnejad, the carpenter. "America, who imposed the sanctions, wants to create chaos."